) recently announced the final results of its modified Dutch
auction tender offer of a maximum aggregate value of $1 billion.
The Dutch auction tender offer, which ended yesterday, was to
repurchase its ordinary shares, including ordinary shares
represented by American Depositary Shares.
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We note that 1 ADS is equal to 1 share of Elan.
As a result of the tender offer, the Dutch auction strike price
stands at $11.25. This has resulted in Elan retiring 14.8% of the
current shares in issue. The company tendered 116.4 million
shares at the strike price, out of which 92.3% (107.4 million
shares) were tendered by a corporate shareholder.
In the tender offer, 6.1% (excluding the corporate shareholder
tender) of the issued shares were tendered at $12.00 or less and
4.3% of the issued shares were tendered at $11.75 or $12.00.
Moreover, 73.1% of all other issued shares, apart from the
corporate shareholder shares, were not tendered at any price
within the offered range of $11.25 to $13.00.
The tender offer is expected to be accretive immediately for all
shareholders. This is in line with the strategy of unlocking the
value of multiple sclerosis drug Tysabri.
Following the determination of the Dutch auction strike price at
$11.25, Royalty Pharma confirmed that its offer for each
outstanding share and ADS of Elan is also the same. Earlier this
week Royalty Pharma offered different prices for different Dutch
auction strike prices, where it mentioned that if the strike
price is $11.25, it will offer the same for each outstanding
share and ADS of Elan.
Elan earlier stated that it will take into consideration any
credible proposal from Royalty Pharma or any other company. The
Board of Directors at Elan is expected assess Royalty Pharma's
offer and will advise its shareholders accordingly.
Meanwhile, Elan closed its Tysabri (natalizumab) collaboration
) earlier this month. As a result, Biogen gained full strategic,
commercial and operational control over the drug.
We expect investor focus to remain on Royalty Pharma's offer to
Elan going forward. Elan, a biotechnology company, currently
carries a Zacks Rank #3 (Hold). Currently, well-placed biotech
). Both stocks carry a Zacks Rank #1 (Strong Buy).